The National Bank of Ukraine unifies the limits on the long and short open FX position of banks to deepen the FX market, strengthen its liquidity, and ensure more effective FX risk management by banks.
In spring 2018, the NBU initiated adjustment of open FX position limits. From 1 May 2018, the limit on bank total long open FX position (L13-1) increased from 1% to 3%, the limit on bank total short open FX position (L13-2) decreased from 10% to 8%.
According to the NBU, this step had no negative impact on FX market and even contributed to its stabilization. Following the change of limits against the backdrop of increased transactions in the interbank FX market, the total of USD 10 million was sold on a daily basis in May, while it was USD 7.6 million in April. Banks started contributing more actively to smoothing the hryvnia exchange rate fluctuations, which enabled the decrease in hryvnia exchange rate monthly volatility.
Thus, the NBU Board decided to balance the bank positions and set the same “mirror” limits at 5% for both long and short open FX positions. Accordingly, the limit on bank total long open FX position (L13-1) is increased from 3% to 5%, and the limit on bank total short open FX position (L13-2) is decreased from 8% to 5%.
The aforementioned amendments were approved by NBU Board Resolution No. 347-рш dated 19 June 2018 On Amendments to NBU Board Resolution No. 184-рш dated 29 March 2018. The amendments shall take effect on 1 July 2018.